HomeMy WebLinkAboutRES 15-145RESOLUTION NO. 15-145
BE IT RESOLVED BY THE CITY COUNCIL*OF THE
CITY OF BEAUMONT:
THAT the firm of BKD, LLP, of Houston, Texas, be and it is hereby designated as the
independent auditing firm for the City of Beaumont in the amount of no greater than
$75,000' for the fiscal year ending September 30, 2015 with an option to renew on a
year-to-year basis for a period not to exceed three (3) additional years, upon mutual
consent of both parties. Fees for the audits of fiscal years 2016, 2017, and 2018 will be
$77,250, $79,500, and $82,000, respectively. The agreement is substantially in the form
attached hereto as Exhibit "A" and made a part hereof for all purposes; and,
THAT the City Manager be and he is hereby authorized to execute the contract
with BKD, LLP for the purposes described herein.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 21st day of
July, 2015.
.04%�C
n
SAMPLE ENGAGEMENT LETTER
August 6, 2015
Mayor and
Members of City Council
City Manager
City
7301
XY2
We
will
.ENC
We I
ende
Our
✓
✓ Issuing a report on your schedule of expenditures of federal awards.
EXHIBIT "A"
25 experience BKO
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MS.
Bance
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City of XYZ, Texas
August 6, 2015
Page 2
OUR RESPONSIBILITIES
We will conduct our audit in accordance with auditing standards generally accepted in the United
States of America (GRAS), the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States and U.S. Office of
Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and
Nonprofit Organizations. Those standards require that we plan and perform:
,® ✓ The audit of the financial statements to obtain reasonable rather than Aute assurance about
whether the financial statements are free of material misstatemen than
caed by fraud or
error. An audit involves performing procedures to obtain audit ev� e ab ut the a punts and
disclosures in the financial statements. The procedures selected depend��li0 audrtos
judgment, including the assessment of the risks of maten' I misstatement e fcial
statements, whether due to fraud or error. An audit also iii udes evaluatmgipropriateness
of accounting policies used and the reasonableness o ig „ t accountm estunates made by
• management, as well as evaluating the overall prime®r o ih fmanc tatements.
✓ The audit of compliance with the types of cb�� ce . irements-described in the OMB
Circular A-133 Compliance Supplementqppli ch major federal award program to
obtain reasonable rather than absolute asu ance �quwhether noncompliance having a direct
and material effect on a major federal aagranimurred.
Because of the inherent Iimrtatr n audoge with the inherent limitations of internal
control, an unavoidable risk that sh�e �atenalissta ements or noncompliance having a direct
and material effect may not be detec'te' exists; eY,en though the audit is properly planned and
performed in accordan AAS"
i k
In making our risk assess'.der internal control relevant to the entity's preparation
and fair presenW of the cial statements in order to design audit procedures that are
appropriat the oircumstan s but. not for the purpose of expressing an -opinion on the
effective s of the ti ii al control. However, we will communicate to you in writing
concerning rr, is ef-iencies or material weaknesses in internal control relevant to the
audit of the financial st ents that we have identified during the audit. Also, in the future,
procedures coul&_1 inadequate because of changes in conditions or deterioration in design
or operation. Tw�`6 more people may also circumvent controls, or management may override
® the system.
We are available to perform additional procedures with regard to fraud detection and prevention
at your request, subject to completion of our normal engagement acceptance procedures. The
® actual terms and fees of such an engagement would be documented in a separate letter to be
signed by you and BKD.
® Kevin Kemp, partner, is responsible for supervising the engagement and authorizing the signing
of the report or reports.
BIND
26
City of XYZ, Texas
August 6, 2015
Page 3
We will issue a written report upon completion of our audit of the City of North Richland Hill's
financial statements. Our report will be addressed to the mayor and members of city council of
The City of XYZ. We cannot provide assurance that an unmodified opinion will be expressed.
Circumstances may arise in which it is necessary for us to modify our opinion, add an emphasis
of matter or other matter paragraph(s), or withdraw from the engagement. If we discover
conditions that may prohibit us from issuing a standard report, Nve will notify you as well. In
such circumstances, further arrangements may be necessary to continue our engagement.
We will also express an opinion on whether the combining financial statements ad various
budget and actual schedules (supplementary information) are fairlys a d, m a `aterial
respects, in relation to the financial statements as a whole. r
YOUR RESPONSIBILITIES
Our audit will be conducted on the basis that manage ent ac 'i _ wledge an icTerstand that they
have responsibility:,
a. for the preparation and fair pre.
accounting principles generall
b. for the design, implementation
preparation and fair ppesentatic
misstatement, whethe to f
c. for idenf in and ensuµ ""eco
pj g ,
grants appli at 'ed our aci t
d. to provide us i ` �#
of theffancial sements in accordance with
hn _1 e United States of America;
of internal control relevant to the
bments that are free from material
We with the laws, regulations, contracts and
(including your federal award programs); and
information of which management is aware that is relevant to the
d fair presentation of the financial statements such as records,
in and other matters;
ii. adds Mal information that we may request from management for the purpose
of -the audit; and
iii. unrestricted access to persons within the entity from whom we determine it
necessary to obtain audit evidence.
As part of our audit process, we willrequest from management written confirmation
acknowledging certain responsibilities outlined in this engagement letter and confirming:
• The availability of this information
• Certain representations made during the audits for all periods presented
27 experience BKD
r BKO
City of XYZ, Texas
August 6, 2015
Page 4
• The effects of any uncorrected misstatements, if any; resulting from errors or fraud
aggregated by us during the current engagement and pertaining to the latest period
presented are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole
The results of our tests of compliance and internal control over financial reporting performed in
connection with our audit of the financial statements may not fully meet the reasonable needs of
report users. Management is responsible for obtaining audits, examinatio 5 eed-upon
procedures or other engagements that satisfy 'relevant legal, regulatory rx�r ntractual
requirements or fully meet other reasonable user needs. 14
With regard to supplementary information:
• Management, is responsible for its preparation
• Management will provide certain written , exp
information at the conclusion of our e gab m
• Management will include our repo , .o this su
document that contains this sup le m i t'
reported on the supplement rmio
• Management will make the sup ertary%
users if it is not vreseated with th a ted fin
OTHER SERVICES
with a t3cable criteria
mj& the supplementary
aryiiformation in any
and indicates we have
0
ion readily available to intended
statements
We may perform other 'fires for you covered by this engagement letter. You agree to
assume full responsibxh or the b tantl` outcomes of those services, including any findings
that may result. You also ;a ln.led'gat those services are adequate for your purposes and
that you will '.
h '14 3h and or the performance of those services to ensure that they meet
managemennt obi ctives. and all decisions involving management functions related to
those ser es w.1 b Ue b ou, and you accept. full responsibility for such decisions. We
understands h will i date a management -level individual to be responsible and
accountablee or oversee a performance of those services, and that you will have determined
this individual ivai to conduct such oversight.
ENGAGEMENT FEES
Our fees will be for financial statement audit and $ for Single
Audit) which includes an administrative fee to cover items such as copies, postage and other
delivery charges, supplies, technology -related costs such as computer processing; software
licensing, research and library databases and similar expense items.
28
City of XYZ, Texas
August 6, 2015
Page 5
Our pricing for this engagement and our fee structure are based upon the expectation that our
invoices will be paid promptly. We will issue progress billings during the course of our
engagement, and payment of our invoices is due upon receipt. Interest will be charged on any
unpaid balance after 30 days at the rate of 10% per annum.
Our engagement fee does not include .any time for post -engagement consultation with your
personnel or third parties, consent letters and related procedures for the use ctf our reports in
offering documents, inquiries from regulators or testimony or deposition rearding any
subpoena. Charges for such services will be billed separately.
Our fees may also increase if our duties or responsibilities are incieaeby remaking any
regulatory body or airy additional new accounting or auditing standards.
co . with
you in the event any other regulations or standards are issuRd that may' impa1, .,.,urlxlwens.
If our invoices for this or any other engagement you in . ha- "u th BKD ar of paid within 30
days, we may suspend or terminate our services fort fyisa r enga ent. In the event
our work is suspended or terminated as a result r npay t, you ewe will not be
responsible for any consequences to you.
BKD is not acting as your, municjpal advise&' u411 Secff6S 15B of the Securities Exchange Act
of 1934, as amended. As such r bis not r , ding any action to you and does not owe
you a fiduciary duty with rest On. ormatxon or communications regarding municipal
financial products or the issuance of umcipa ` cunties. You should discuss such information
or communications and allntermal or external advisors and experts you deem
appropriate before actino anq`hmfo%nation or material provided by BKD.
Our workpape docu� lion retained in any form of media for this engagement are the
property o D. e can be ompelled to provide information under legal process. In addition,
we may bues ed G' "reQry. or enforcement bodies to make certain workpapers available
to them pur�c auth�?ranted bylaw or regulation. You agree that we have no legal
responsibility to you in ti event we provide such documents or information.
To the extent pe I d by the laws of the State of Texas, you agree to indemnify and hold
harmless BKD and its personnel from any claims, liabilities, costs and expenses relating to our
services under this agreement attributable to false or incomplete representations by management,
except to the extent determined to have resulted from the intentional or deliberate misconduct of
BKD personnel.
To the extent permitted by the laws of the State of Texas, you agree that any dispute regarding
this engagement will, prior to resorting to litigation, be submitted to mediation upon written
request by either party. Both parties agree to try in good faith to settle the dispute in mediation.
The American Arbitration Association will administer any such mediation in accordance with its
Commercial Mediation Rules, The results of the mediation proceeding shall be binding only if
each of us agrees to be bound. We will share any costs of mediation proceedings equally.
29 experience BKD
K f,- BKD
City of XYZ, Texas
August 6, 2015
Page 6
Either of us may terminate these services at any time. Both of us must agree, in writing, to any
future modifications or extensions. If services are terminated, you agree to pay us for time
expended to date. If any provision of this agreement is declared invalid or unenforceable, no
other provision of this agreement is affected and all other provisions remain in full force and
effect.
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City of XYZ, Texas
August 6, 2015
Page 7
'This engagement letter represents the entire agreement regarding the services described herein
and supersedes all prior negotiations, proposals, representations or agreements, written or oral,
regarding these services. It shall be binding on heirs, successors and assigns of you and BKD.
We may from time to time utilize third -party service providers, e.g., domestic software
processors or legal counsel, or disclose confidential information about you to third -party service
providers in serving your account. We remain committed to maintaining the confidentiality and
security of your information. Accordingly, we maintain internal policies, fe
edures and
safeguards to protect the confidentiality of your information. In additiowitsecure
confidentiality agreements with all service providers to maintain the . rifidentio of your
information. In the event we are unable to secure an appropriate con tial 1greement, you
will be asked to provide your consent prior to the sharing of your confi sv ti { infoat ou with
the third -party service provider.
We will, at our discretion or upon your request, deliv�e`t�maiMIX or other confidential i9
information to you electronically via email or othe knee sin '{ Fou reco� mze and accept the
risk involved, particularly in email delivery as th ternet is not nsilysecure medium of
communication as messages can be intercepte' : ' d read .r ose det , ined to do so.
You agree you will not modify these docuts for f al use or for distribution to third
parties. You also understand that we may Vision e d you documents marked as draft and
understand that those are for your review p os j oty, s oId not be distributed in any way and
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should be destroyed as soon as p) , M
If you intend to include these firrair 'l tatem is d our report in an offering document at in
some future date, you auseek ou ission to do so at that time. You agree to provide In
reasonable notice to all ufficen .time f `r us to perform certain additional procedures. Any
time you intend to publis otlT `s reproduce these financial statements and our report and
make refercetta r fain am in any manner in connection therewith, you agree to provide us ��
with printer proo s or m e for our review and approval before printing or other X
reprodue o . Yo T o Ovide us with a copy of the final reproduced material for our
approval e r I.. distr b tech. Our fees for such services are in addition to those discussed
elsewhere is letter.
You agree to no j ,y on desire to place these financial statements or our report thereon
along with other t ation, such as a report by management or those charged with governance
on operations, financial summaries or highlights, financial ratios, etc., on an electronic site. You
recognize that we have no responsibility as auditors to review information contained in .
electronic sites.
Any time you intend to reference our firm name in any manner in any published materials,
including on an electronic site, you agree to provide us with draft materials for our review and
approval before publishing or posting such information.
31 experience BKD L
City of XYZ, Texas
August 6, 2015
Page 8
BKD is a registered limited liability partnership under Missouri law. Under applicable
professional standards, partners of BKD, LLP have the same responsibilities as do partners in a
general accounting and consulting partnership with respect to conformance by themselves and
other professionals in BKD with their professional and ethical obligations. However, unlike the
partners in a general partnership, the partners in a registered limited liability partnership do not
have individual civil liability, directly or indirectly, including by way of indemnification,
contribution, assessment or otherwise, for any debts, obligations or liabilities of or chargeable to
the registered limited liability partnership or each other, whether arising in,#� r't, contract or
otherwise. _
Please sign and return the attached copy of this letter to indicate your"W o ,,'l gementI f, and
agreement with, the arrangements for our audit of the financial statements luding o r
respective responsibilities. If the signed copy you return to us is in electro K ,o you agree
that such copy shall be legally treated as a "duplicate origt al" of this agreen"
BKD, LLP
,N
4..
Y�+x, ,am .ery.•
Acknowledged and agreed to on behalf of
City of XYZ, 0111-11111
MI
, Mayor
DATE
BY
, City M
DATE
BKD
32